Tories would end ‘shady’ deal with Samsung

TORONTO – The Progressive Conservatives would shake up Ontario’s energy sector if they’re elected next October by scrapping two key components of the governing Liberals’ plan for green energy.

Seizing a hot-button issue in the lead up to the Oct. 6 vote, Opposition Leader Tim Hudak unveiled his first detailed election pledge Tuesday aimed at helping families who are struggling with soaring electricity bills.

If elected, the Conservatives would rip up Premier Dalton McGuinty’s “shady” deal with Samsung to manufacture components for green energy projects and dump the province’s expensive feed-in tariff program, he said.

Scrapping the $7-billion deal with the Korean giant and the lucrative rates paid to green energy producers for the power they generate will also restore transparency and competition to the province’s energy sector, Hudak said.

Ontario companies who could have built the projects at a better price were “passed over” by the Liberals, he added.

“This is a shady deal that Dalton McGuinty signed behind closed doors that is going to drive up hydro bills even more for seniors and families,” Hudak said. “It is odious, it is wrong, and I will end the deal.”

The Tories would still honour 1,543 existing contracts under the feed-in tariff program — which pays producers to feed green energy into the grid — but no one else would be able to apply, his staff said.

No power contracts have been signed yet with Samsung, Hudak said. The current agreement only promises to negotiate for power purchases down the road.

“They’ve not added a single watt to the grid,” he said. “Listen, we will be fair, we will be reasonable, but we will be firm. We will end the Samsung ripoff.”

McGuinty fired back in the legislature, warning that the move would put thousands of much-needed jobs in Ontario at risk.

“I think that is reprehensible,” he said. “What is he going to say to all those families who have found secure employment in an exciting, new, Ontario-based clean energy industry? I don’t know what he intends to say to them.”

McGuinty’s staff couldn’t immediately say how many jobs stemming from the Samsung deal have been created to date. But Hudak’s promise would put more than 1,800 jobs at risk in Windsor, Tillsonburg and Toronto, they said.

The Tories also want to expand “dirty” coal-fired power generation and reopen eight plants that were shut down under his government’s watch, McGuinty charged.

However, Hudak has pledged to continue phasing out coal-fired power in Ontario and hinted Tuesday that the answer may lie in hydroelectric power.

The Conservatives support renewable energy, but the province should have a “transparent and competitive” process to get the best deal for ratepayers, he said.

McGuinty also accused his rival of opposing foreign investment in Ontario, saying Hudak may go after automakers Honda and Toyota next.

“It’s not the 1960s. It’s not the 1970s. It is the 21st century,” the premier said. “We know how to compete and win.”

But Hudak said all he wants to see is a level playing field. He’d even allow Ontario Power Generation — the publicly owned utility that the Liberals excluded from participating in any wind and solar projects — to make a bid.

The opposition parties have been fuming over the Samsung deal since it was announced more than a year ago.

They’ve condemned the deal as a massive taxpayer subsidy to a foreign company and accused the government of hiding details from taxpayers who will end up footing the bill.

The Liberals say most of the details have been made public, except for “commercially sensitive” sections that will be released after the company builds new plants in Ontario. Three are expected to be in operation next year.

But it’s still unclear how much it would cost taxpayers to kill the Samsung deal.

While he quickly condemned Hudak for promising to kill the deal without knowing the details, Energy Minister Brad Duguid couldn’t come up with the cost of scrapping the deal, or even say whether the agreement includes a penalty fee.

“It’s a contract, so if you break a contract, one would expect that that’s not easy to do,” said Duguid when pressed by reporters to provide details. “But I don’t have any — it’s a contract, and I think Mr. Hudak really owes it to us to be able to tell us how does he think he can get out of this contract without a penalty.”

The full financial details of cancelling the agreement would be “subject to discussions with the company” and could include legal action, said his spokesman Andrew Block.

Some details of the Samsung agreement were made public in January by the New Democrats, who obtained a copy through an access-to-information request, minus all the provisions regarding payments and premiums for Samsung.

The deal calls on Samsung to build four new manufacturing plants in Ontario for solar and wind farms as well as green energy projects, with specific targets of 400 megawatts of new wind power and 100 new megawatts of solar power for each of the five phases of the deal.

Samsung is expected to create about 16,000 thousand jobs in Ontario and help the province create a hub of green energy companies and expertise that can export its products around the world.

Most of the jobs will be temporary, but 1,440 permanent manufacturing and related jobs are expected to be created.

In return, Ontario guarantees Samsung space on the province’s limited transmission grid, plus premium rates for the electricity it generates.

NDP Leader Andrea Horwath stopped short of matching Hudak’s promise to scrap the Samsung deal, saying she wants to see it first.

But the Liberals still haven’t come clean about the details, despite all their talk about running an open government, she said.

“This government is more interested in hiding information, keeping information from the public, than it is about being open and transparent,” Horwath said.

Samsung said it expects any future government to honour the agreement it signed in January 2010.

“Samsung and our partners are well on our way to fulfilling the terms of our agreement with the government of Ontario,” the company said in a release. “Announcements made to date include the creation of 200 jobs in the production of solar inverters in Toronto, 700 jobs in the manufacturing of wind towers in Windsor and 900 jobs in the building of wind blades in Tillsonburg.”